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Diamond Foods Inc (NAS:DMND)
Piotroski F-Score
0 (As of Today)

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Diamond Foods Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Net Income was 11.177 + 6.29 + 7.869 + 7.779 = $33.1 Mil.
Cash Flow from Operations was 54.419 + -5.459 + -15.506 + 5.074 = $38.5 Mil.
Revenue was 229.667 + 186.067 + 201.81 + 224.849 = $842.4 Mil.
Gross Profit was 61.158 + 52.957 + 54.489 + 60.879 = $229.5 Mil.
Average Total Assets from the begining of this year (Oct14)
to the end of this year (Oct15) was
(1338.411 + 1271.992 + 1245.767 + 1212.692 + 1281.782) / 5 = $1270.1288 Mil.
Total Assets at the begining of this year (Oct14) was $1,338.4 Mil.
Long-Term Debt was $627.1 Mil.
Total Current Assets was $353.2 Mil.
Total Current Liabilities was $205.3 Mil.
Net Income was -15.06 + -105.633 + -1.856 + 7.694 = $-114.9 Mil.

Revenue was 220.577 + 190.892 + 219.07 + 246.621 = $877.2 Mil.
Gross Profit was 55.928 + 45.096 + 49.289 + 59.39 = $209.7 Mil.
Average Total Assets from the begining of last year (Oct13)
to the end of last year (Oct14) was
(1307.218 + 1228.757 + 1223.285 + 1192.834 + 1338.411) / 5 = $1258.101 Mil.
Total Assets at the begining of last year (Oct13) was $1,307.2 Mil.
Long-Term Debt was $636.3 Mil.
Total Current Assets was $403.3 Mil.
Total Current Liabilities was $287.1 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Diamond Foods Inc's current net income (TTM) was 33.1. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Diamond Foods Inc's current cash flow from operations (TTM) was 38.5. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Oct14)
=33.115/1338.411
=0.02474203

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Oct13)
=-114.855/1307.218
=-0.08786216

Diamond Foods Inc's return on assets of this year was 0.02474203. Diamond Foods Inc's return on assets of last year was -0.08786216. ==> This year is higher. ==> Score 1.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Diamond Foods Inc's current net income (TTM) was 33.1. Diamond Foods Inc's current cash flow from operations (TTM) was 38.5. ==> 38.5 > 33.1 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Oct15)=Long-Term Debt/Average Total Assets from Oct14 to Oct15
=627.13/1270.1288
=0.49375307

Gearing (Last Year: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=636.289/1258.101
=0.50575351

Diamond Foods Inc's gearing of this year was 0.49375307. Diamond Foods Inc's gearing of last year was 0.50575351. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Oct15)=Total Current Assets/Total Current Liabilities
=353.194/205.348
=1.71997779

Current Ratio (Last Year: Oct14)=Total Current Assets/Total Current Liabilities
=403.323/287.099
=1.40482203

Diamond Foods Inc's current ratio of this year was 1.71997779. Diamond Foods Inc's current ratio of last year was 1.40482203. ==> This year's current ratio is higher. ==> Score 1.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Diamond Foods Inc's number of shares in issue this year was 31.9. Diamond Foods Inc's number of shares in issue last year was 31.5. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=229.483/842.393
=0.27241798

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=209.703/877.16
=0.23907041

Diamond Foods Inc's gross margin of this year was 0.27241798. Diamond Foods Inc's gross margin of last year was 0.23907041. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Total Assets at the Beginning of This Year (Oct14)
=842.393/1338.411
=0.62939785

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Oct13)
=877.16/1307.218
=0.67101279

Diamond Foods Inc's asset turnover of this year was 0.62939785. Diamond Foods Inc's asset turnover of last year was 0.67101279. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+1+1+0+1+0
=7

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Diamond Foods Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Diamond Foods Inc Annual Data

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15
Question 1 111110001
Question 2 111010101
Question 3 111000001
Question 4 011011111
Question 5 010010001
Question 6 110010011
Question 7 000001000
Question 8 111010111
Question 9 110000010
F-score 685162347

Diamond Foods Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
Question 1 0000000111
Question 2 1110000111
Question 3 0000011111
Question 4 1111110111
Question 5 0000000111
Question 6 0001111111
Question 7 0010000000
Question 8 1111100111
Question 9 0011111100
F-score 3354443877
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